The National Development and Reform Commission announced the start of the central frozen pork reserve purchase and storage work
Yangcheng Evening News reporter Li Zhiwen
How long does it take for the whole industry to make money from almost lying down to a general loss?
The answer for the pig industry is more than a year.
A reporter from the Yangcheng Evening News found that due to factors such as sluggish pig prices and rising feed costs, the pig breeding industry suffered large-scale losses last year, which can be said to be affected by all employees. Among them, the losses of Wen's Co., Ltd. and Zhengbang Technology are even more exaggerated. More than 10 billion yuan, almost spit out the profits in recent years.
Some institutional analysis pointed out that the price of pigs may open a rising channel in the second half of the year, but it may bottom out again in the first half of the year.
In addition, in order to stabilize pork prices, the National Development and Reform Commission announced on February 28 to immediately start the central frozen pork reserve purchase and storage work.
Losses in pig-raising enterprises have become a common phenomenon
On the afternoon of February 25, Haid Group (002311) released its 2021 performance report. It is estimated that the company's operating income in 2021 will be 86.74 billion yuan, a year-on-year increase of 43.79%; its net profit will be 1.601 billion yuan, a year-on-year decrease of 36.54%. first decline.
Haid Group analyzed that one of the important reasons for the decline in its net profit was the drag from the pig breeding business.
The financial report shows that Haid Group will sell 2 million live pigs in 2021, with a loss of 900 million to 1 billion yuan.
According to the data, Haid Group's feed sales in 2020 are 48.765 billion yuan, accounting for 80.84%; the sales of agricultural products are 6.368 billion yuan, accounting for 10.56%, including the seedling business, pig breeding, poultry industry chain business and aquaculture business income. .
It can be seen from this that the pig farming business is not the main business of Haid Group, but the feed sales business.
But Rao is so, Haid Group's profit is still greatly dragged down by the pig business, which shows how staggering the loss of this business is.
Under the background of the recession of the whole industry, the life of pig giants is not easy.
On February 23, Wen's Co., Ltd. released a performance bulletin showing that it expected a loss of 13.337 billion yuan last year, which was its first loss since absorbing and merging Dahuanong for listing in 2015.
As for the reason for the loss, Wen's shares explained that it was affected by factors such as the sharp drop in the price of live pigs and the continuous rise in the price of feed raw materials.
It is worth noting that even if the huge loss exceeds 10 billion yuan, Wen's shares are not the highest loss among listed pig companies.
The previous performance forecast released by Zhengbang Technology showed that last year's expected loss was 18.2 billion-19.7 billion yuan.
Among other listed pig companies, New Hope is expected to lose 8.6 billion to 9.6 billion yuan last year, and Tianbang shares is expected to lose 3.5 billion to 4 billion yuan last year; although the pig leader Muyuan Co., Ltd. is expected to have a net profit of 6.5 billion to 8 billion yuan in 2021 , but the decline was also 70.86%-76.32% compared with the same period of the previous year.
The inflection point will arrive in the second half of this year at the earliest
Where will pork prices go in the future?
When will the inflection point of the pig cycle that pig companies have been waiting for?
In this regard, the report released by Zhong Zhengsheng, chief economist of Ping An Securities and director of the China Chief Economist Forum, and his research team believe that in the short term, pork prices may bottom out again in the first half of this year.
First, from the perspective of seasonality, pork consumption will enter the off-season within a quarter after the Spring Festival.
Second, in the first half of last year, the stock of reproductive sows was still at a high level, which corresponds to the high supply of live pigs in the first half of this year.
Under the mismatch of supply and demand, pork prices are likely to bottom out again.
However, regarding the argument that the price of pork will dip again, Guohai Securities said that the price of pigs is in the process of bottoming out for the second time at the "W bottom", and the current downside of pig prices is very limited.
In the medium term, the above report pointed out that there is a high probability that pork prices will rise in the second half of this year. However, due to the strong wait-and-see sentiment among farmers, the market has divergent views on the sustainability and magnitude of this market.
As a player in the pig industry, Wen's shares have a similar view. It is initially expected that the price of pigs will remain at a low position in the first half of this year, and the industry's production capacity will be accelerated.
An optimistic estimate is that after the third quarter of this year, the price of pigs may enter the upward channel of the next cycle; a pessimistic estimate is that it is still at the social average breakeven line this year, and it may take 2023 to enter the upward channel of the next cycle.
However, the reporter just received a piece of good news: in the face of persistently low pig prices and large-scale loss-making pig enterprises, the state has finally taken action.
On the afternoon of February 28, the reporter learned from the website of the National Development and Reform Commission that the National Development and Reform Commission will immediately start the central frozen pork reserve purchase and storage work with relevant departments, and guide all localities to actively purchase and store.
According to preliminary statistics, at present, Beijing, Jiangxi, Hubei, Chongqing, Yunnan, Shaanxi, Ningxia and other places have started purchasing and storing, and other places will also start in the near future.
The National Development and Reform Commission said that in the next step, it will continue to work with relevant departments to do a good job in reserve adjustment, and if necessary, further increase the purchase and storage efforts to promote the smooth operation of the live pig market.